TNAG-2097-FCO40-2986-HM-Overseas-Civil-Service-(HMOCS)-general-correspondence-1990 — Page 134

Ref.: AP 295/75

A Note on the

Fixed Sterling Conversion Rate for Hong Kong Pensions

Prior to 1947, certain officers of the Hong Kong Government had their salaries and pensions paid in sterling. Consequent upon Government's adoption of the recommendations by the 1947 Hong Kong

Kong Salaries Commission, new terms and conditions of service were introduced with effect from 1.1.1947. Among the various changes introduced under the new terms was the removal of the distinction between sterling and Hong Kong dollar paid officers. All salaries and emoluments payable to public officers in Hong Kong were to be expressed in Hong Kong dollars henceforth. Officers on а sterling salary were however allowed the option of either remaining on their former terms of service or transferring to a dollar salary under the new terms of service.

2.

In response to staff concern over payment of salaries and pensions in sterling, the problem was discussed with the then Secretary of State in February 1948, and the following arrangements were finally agreed and introduced in July 1952 :-

3.

(a)

(b)

(c)

the pensions and retiring gratuities awarded to officers employed by the Hong Kong Government on а sterling salary, who accepted conversion to a dollar salary under

under the terms of the 1947 Salary Revision, were to be paid in sterling at a fixed exchange rate of HK$16 to £l, unless they elected otherwise within a specified period;

officers eligible for the above concession were to have the right to elect at any future date to receive their pensions in

in Hong Kong dollars in the normal way, but once they had so elected they, would not be able to claim the guaranteed exchange rate; and

the Hong Kong Government would reserve its right to review the exchange rate

if at any future date pensionable emoluments or pensions were increased in consequence of a depreciation of the Hong Kong dollar in terms of sterling.

That is, the fixed sterling conversion rate only applies to those eligible officers who were on a sterling salary prior to 1947 and had accepted conversion to a dollar salary under the 1947 Revision.

Civil Service Branch

June 1990

(0066p: 92)